On April 1, 2021, Sarasota Cor

On April 1, 2021, Sarasota Corporation issued $416,000, 5-year bonds. On this date, Shoreline Corporation purchased the bonds from Sarasota to earn interest. Interest is received semi-annually on April 1 and October 1 and Shoreline’s year end is March 31. Below is a partial amortization schedule for the first three interest periods of the bond issue. Semi-Annual Interest Period Interest Received Interest Revenue Amortization Bond Amortized Cost April 1, 2021 $435,182 October 1, 2021 $8.320 $6,528 $1,792 433,390 April 1, 2022 8,320 6,501 1.819 431,571 October 1, 2022 8,320 6.474 1,846 429,725 Were the bonds purchased at a discount or at a premium? Bonds purchased at a premium What is the face value of the bonds? Face value of the bonds $ 416000 What will the bonds’ amortized cost be at the maturity date? Bonds’ amortized cost at the maturity date $ What is the bonds’ contractual interest rate? The market interest rate? (Round answers to 2 decimal places, e.g. 52.75.) Annual Semi-annual Contractual interest rate % % Market interest rate % % Prepare the journal entries to record the purchase of the bonds; the receipt of interest on October 1, 2021; the accrual of interest on March 31, 2022; and the receipt of interest on April 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Apr. 1, 2021 Investments at FVTPL Prepare the journal entries to record the purchase of the bonds; the receipt of interest on October 1, 2021; the accrual of interest on March 31, 2022; and the receipt of interest on April 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Apr. 1, 2021 Investments at FVTPL (To record purchase of investment.) < > (To record collection of interest.) > < (To accrue interest revenue.) (Collection of interest receivable.)

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